"Invest for at least 50 years!" Why is Warren Buffett so bullish on Japan?

Speaking at his last shareholder meeting before retirement, Buffett, 94, said thatEven if the Bank of Japan raises interest rates in the future, it will not sell Japanese stocks, pointing the way for global investors.

In a rare move, the "stockbroker" defined his bet on Japan in terms of the "long term" - the"intends to continue to hold these merchant company stocks for fifty to sixty years."He even said, "I wish I had invested $100 billion instead of $20 billion".

And Buffett's handpicked successor, Abel, likewise said he "envisions holding Japan Trading stock for at least 50 years, or forever."

This handover across the ages has unveiled a new script for global capital flows.

#01

Warren Buffett's final "Retirement Q&A":

Why Japan?

May 3, 2025 Berkshire Hathaway annual shareholders meeting into the end of the 94-year-old "stock god" Buffett suddenly announced plans to retire at the end of the year, the current vice chairman Greg Abel will take over the baton to become the CEO of Berkshire.

In the finale of this "Warren Buffett Era" speech.Warren Buffett affirmed his investment in Japanese companies and expressed his willingness to hold shares for 50 years or more.

👉关于日本投资逻辑，他给出核心答案：

Buffett said.An investment in Japan is entirely consistent with Berkshire's investment philosophy.The five Japanese trading companies in which Berkshire has invested have performed very well in the past, and it intends to continue to hold their shares for fifty to sixty years, and hopes to build a long and deep relationship with them.

Buffett said, "Berkshire now has $20 billion invested in Japan, and I even wish we had invested $100 billion instead of $20 billion in the first place."

Buffett's designated successor, Abel, said he envisions holding shares of the Japanese trading company for at least 50 years, or forever.

When asked about investing overseas, Buffett even added: "Wouldn't invest overseas willy-nilly unless there was an excellent opportunity" -Apparently, Japan is what he sees as a "great opportunity".

#02

The yen and Japanese assets:

The Underrated "Friend of Time"

Buffett's judgment is highly in line with the market trend, from the current market viewpoint:
The yen is bullish in the medium to long term

• Risk aversion properties come to the fore:U.S. tariff policy exacerbated dollar volatility, part of the capital out of the dollar assets to other assets, as of April, foreign net buying Japanese stocks and Japanese bonds hit a record high.
• Exchange rate safety cushions:Although many people are used to the yen exchange rate of about 4.0 in the previous two years, but in fact, the yen against the yuan long-term level of about 6.0, the current 5.0 is still relatively low.

Certainty in the Japanese property market

• House prices continue to rise:Tokyo's 23 wards saw a year-on-year rise of 11.21 TP3T in unit prices for second-hand apartment transactions, with demand outstripping supply in core locations.
• Rental income is stable:The rental return of Japanese properties is about 3-5%, and the rental return of high quality locations in the short-term rental market can reach 5-6%, which stabilizes the cash flow in foreign currencies.
• The conflict between supply and demand has intensified:The number of new homes for sale across the Tokyo area has halved, and competition for quality second-hand homes is fierce.

This fits perfectly with Warren Buffett's investment logic - "the five merchant houses in which the investment is made are fully consistent with Berkshire's philosophy."

As he said.The value of Japanese assets needs to be measured on a "50-year" scale.rather than accounting for short-term exchange rate fluctuations.

#03

Opportunities for ordinary people:

How do I get on this train?

For the average person, the easiest to keep up with may still be theReal estate investment.

The property market in Japan's major cities such as Tokyo and Osaka is extremely prosperous. According to Jones Lang LaSalle, real estate investment in Japan's Tokyo area reached $7.65 billion in January-March 2024, surpassing New York and London, theIt has jumped to the first place in the world and become the new favorite of global asset allocation.

Warren Buffett's regret that "I wish I had invested $100 billion in Japan" prompts us to think about two key points:
Exchange rate window still open

• The current 5.0 exchange rate equates to an asset discount of 23% compared to a high of 6.5 by 2021.
• Even if the yen rallies to 5.5, it is still 8% below the historical pivot.

Asset selection criteria

• Core locations are preferred: this type of property is the most resistant to declines.
• Smaller units are more flexible: 30-50 m² balances occupancy and mobility.
• Long-term holding mentality: offset short-term fluctuations with rental income and wait for revaluation.

When 94-year-old Warren Buffett defines the investment cycle as "50 to 60 years" and 63-year-old Abel promises to "hold forever," the average investor should read more into the meaning of the term---.In the midst of global turmoil, Japanese assets may be one of the few options that can ride out the cycle.

As we learned from the stock god Warren Buffett: the luckiest thing is not to be born in a certain era, but to see undervalued values.

If you are interested in investing in Japan, please feel free to contact us!